I am curious how electricity is priced. Why are more and more utility providers charge based on ‘infrastructure cost’ or ‘fixed platform fee’ instead of usage fee?
That's mostly incorrect. In Maryland, like in most places in the country, the distribution infrastructure is controlled by regulated monopolies that buy power on the market from generators. Your bills separate out the fees for usage and the fees for distribution, and the Maryland PSC has to approve both.
We've been here before [1]. In that case, extra load on the grid meant the municipality needed to purchase more power (at higher prices), which raised everybody's prices.
Electricity supply is highly regulated. Prices for electricity are constrained and often set by state regulators. These are so-called "usage fees". But beyond that the utility is allowed to charge customers for infrastructure and transmissio and those fees are out of control. We recently had a court case where a North Carolina utility illegally overcharged customers but the judge didn't assign damages because legally the utility could just charge customers for those damages [2]. And the legislature passed laws to protect the utility as well.
This is going to get worse too because private equity is rapidly moving into this market and they know that capex can be entirely pushed onto customers with no recourse.
So the data centers tend to get sweetheart deals on electricity too. So while the total cost of electricity has gone up (per Mwh), they pay less pushing even more burden onto everyone else. Plus they get discounts on property taxes, energy tariffs and other taxes, as in the case of Kevin O'Leary's mega-DC in Utah.
But this state interconnect bill is another level of evil because it's pushing the costs onto states that have nothing to do with the data center and won't get any "benefit" (there is no benefit) anyway.
What we need are laws that make these projects pay for their own infrastructure. This might cause them to build near power sources. Great. Away from people, mostly.
The level of regulatory corruption here is actually sickening. Take Elon's Grok DC in Memphis that exploits local laws against clean air by using "mobile" gas turbines in the city of Memphis.
Funny how most people were complaining about lack of infrastructure spending before AI, now that the bills come due it's "WAIT! I'm paying for the thing I use!?!"
Are Americans really getting stickershock from $2B? Lets search some random numbers + "Maryland"
They invested $1B in quantum computing. Crickets.
$10B dollar purple line
$9B dollar missed pension returns, $3B directly to wallstreet hedgefunds POOF! (Explains why the stock market rises as the country takes on more and more debt)
The list literally goes on and on, probably over $30B of sunk costs into either nothing, planning or infrastructure that wasn't properly maintained.
>WBAL News Radio
>6 days ago — Congressman Andy Harris says the cost of the Key Bridge rebuild was
>nearing $10 billion, and that's the reason the state won't go forward
What's the traffic for this $5B-$10B bridge? 34,000.
America's energy infrastructure has been chronically under-invested for the last 60 years, widening the gap between young and old. All the articles talking about the cost of AI are written by entrenched forces that AI have already replace, their free money from infrastructure scams.
> most people were complaining about lack of infrastructure spending before AI
Presumably they'd like the infrastructure spending to go to infrastructure that improves their lives in some way. I somehow doubt that, when complaining, the vast majority of said people had in mind "let's spend hundreds of billions of dollars on datacenters while everything else crumbles".
But also, the price of grid upgrades are more and more often being passed directly to customers and you don’t really get a choice of whether or not you’re a customer.
Yeah, turns out people want things that benefit them and not things that exclusively benefit the billionaires who control AI.
I complain about not enough direct flights from my local airport, if they put in a bunch of direct flights for billionaires only I would complain even harder.
ETA: utility companies make profit on capex, not opex
https://www.organizedmoney.fm/p/how-private-equity-is-drivin...
https://www.thebignewsletter.com/p/data-centers-arent-the-ma...
Electricity supply is highly regulated. Prices for electricity are constrained and often set by state regulators. These are so-called "usage fees". But beyond that the utility is allowed to charge customers for infrastructure and transmissio and those fees are out of control. We recently had a court case where a North Carolina utility illegally overcharged customers but the judge didn't assign damages because legally the utility could just charge customers for those damages [2]. And the legislature passed laws to protect the utility as well.
This is going to get worse too because private equity is rapidly moving into this market and they know that capex can be entirely pushed onto customers with no recourse.
So the data centers tend to get sweetheart deals on electricity too. So while the total cost of electricity has gone up (per Mwh), they pay less pushing even more burden onto everyone else. Plus they get discounts on property taxes, energy tariffs and other taxes, as in the case of Kevin O'Leary's mega-DC in Utah.
But this state interconnect bill is another level of evil because it's pushing the costs onto states that have nothing to do with the data center and won't get any "benefit" (there is no benefit) anyway.
What we need are laws that make these projects pay for their own infrastructure. This might cause them to build near power sources. Great. Away from people, mostly.
The level of regulatory corruption here is actually sickening. Take Elon's Grok DC in Memphis that exploits local laws against clean air by using "mobile" gas turbines in the city of Memphis.
[1]: https://newsroom.haas.berkeley.edu/research/power-hungry-cry...
[2]: https://www.wcnc.com/article/news/local/no-refunds-for-duke-...
Are Americans really getting stickershock from $2B? Lets search some random numbers + "Maryland"
They invested $1B in quantum computing. Crickets.
$10B dollar purple line
$9B dollar missed pension returns, $3B directly to wallstreet hedgefunds POOF! (Explains why the stock market rises as the country takes on more and more debt)
The list literally goes on and on, probably over $30B of sunk costs into either nothing, planning or infrastructure that wasn't properly maintained.
>WBAL News Radio
>6 days ago — Congressman Andy Harris says the cost of the Key Bridge rebuild was
>nearing $10 billion, and that's the reason the state won't go forward
What's the traffic for this $5B-$10B bridge? 34,000.
America's energy infrastructure has been chronically under-invested for the last 60 years, widening the gap between young and old. All the articles talking about the cost of AI are written by entrenched forces that AI have already replace, their free money from infrastructure scams.
Presumably they'd like the infrastructure spending to go to infrastructure that improves their lives in some way. I somehow doubt that, when complaining, the vast majority of said people had in mind "let's spend hundreds of billions of dollars on datacenters while everything else crumbles".
But also, the price of grid upgrades are more and more often being passed directly to customers and you don’t really get a choice of whether or not you’re a customer.
I complain about not enough direct flights from my local airport, if they put in a bunch of direct flights for billionaires only I would complain even harder.
Was your comment trying to normalize this, or blame citizens?